In the financial exchange market, smaller and regional banks frequently conduct foreign exchange deals for small amounts of currency, for example up to approximately 1 million units, (so-called Asmalls® transactions) with larger or global banks. When dealing with transactions of this type, the party wishing to buy or sell the currency (the Amarket user®) has to obtain Aquoteso for current bid and/or offer prices from a number of larger players (Amarket makers®) who deal in that particular currency in order to try to obtain an optimal price. The market user responds to a quote by submitting an Aorder® to buy or sell. If the market user is not prepared to conclude the transaction immediately, he cannot guarantee that a particular quote will remain valid whilst he checks with other market makers to try to locate the best deal. We have appreciated that a considerable volume of direct dealing conducted on a daily basis is smalls transactions. The number of market users conducting these deals and the number of deals transacted per day is high. Although the amount generated by such smalls business is generally only a relatively small proportion of the overall business conducted by market makers, it requires a larger proportion of dealer time than some larger value business transactions. This makes the known trading systems inefficient. The transaction process is time consuming and inefficient for the market makers who have to respond to a large number of requests for bid/offer prices on an ad hoc basis and only achieve a modest amount of business on such smalls transactions compared to their overall turnover. The overhead per transaction for both the market users and market makers is therefore high and the satisfaction rate low.
U.S. Pat. No. 5,375,055 teaches a computerized trading system for trading of financial instruments between traders trading at a plurality of trading floors. The trading system provides for composite transactions where, in order to fulfill a taker deal, the transaction is executed between the taker and a plurality of makers. For small value trades, this system becomes impractical, requiring complicated and unnecessary processing.
We have appreciated the problem of encouraging submission of quotes for trading whilst avoiding the technical difficulty of increased unwanted message flow.